Peer Effects in the Adoption of a Youth Employment Subsidy

This paper studies the effects of peers on the adoption of a Youth Employment Subsidy in Chile since its inception. We examine the effects that former classmates’ and coworkers’ adoption have on one's adoption. Identification comes from discontinuities in the assignment rule that allow us to construct valid instrumental variables for peers’ adoption. Using a comprehensive set of administrative records, we find that classmates and especially coworkers play significant roles in the adoption of the subsidy. Peer effects are determined during the early stages of the program's implementation and vary by network characteristics and the strength of network ties.

Labor Segmentation and Dualisation in Hong Kong

With a strong adherence to liberalism, the labor market in Hong Kong is character-ized by a low level of external regulation and an emphasis on self-adaptation as coping. The government mainly attend to the quality of manpower supplied meet-ing the market need, as well as peaceful industrial relations. Segmentation of labor is a natural result of this lowly regulated liberal market. Benefited from a relatively stable economy, unemployment in the past two decades mainly contained, but dualisation observed with widening income gap, as well as an emerging sector of insecure labor. The recent COVID-19 pandemic is leading to a sudden and unex-pected economic crisis. Though with more ad hoc measures, cautious in regulating the labor market maintained. While we are waiting for further government initia-tives, the ending of the employment subsidy from December will certainly worsen the situation. Further dualisation will be the result.

Lessons from the ongoing crisis for labour market institutions in Russia

The paper discusses the role of unemployment insurance system in economic development in general and in the context of the ongoing crisis due to the forced lockdown related to COVID-19. The key elements of employment subsidy programs with reduced working hours or partial unemployment benefits, based on the experience of OECD countries get special attention.

Varieties of Employment Subsidy Design: Theory and Evidence from Across Europe

Employment subsidy programs have experienced considerable expansion across Europe in recent decades. To date, most studies analyzing this policy shift have assumed that these programs are largely equivalent in terms of their designs, effects, and explanations. In contrast, this article argues that employment subsidies are best understood as versatile multi-purpose tools that can be used as means to rather different distributional ends. Using Multiple Correspondence Analysis to explore novel data from hundreds of employment subsidy programs across Europe, this article develops a new typology based on two overarching trade-offs. The typology highlights that employment subsidies may be designed to counteract as well as to sustain insider/outsider divides in the labor market, and that they may be designed to tackle either structural or cyclical labor market problems. In a first empirical evaluation of the typology, programs with different designs are found to vary systematically in terms of distributional outcomes and starting conditions.

Layoffs in a Recession and Temporary Employment Subsidies when a Recovery is Expected

Sunk firing and hiring costs shelter existent employment. This effect is typically amplified by uncertainty due to an option value of waiting. Thus, if (i) sunk firing costs are high, for example due to an employment protection legislation or due to the loss of firm-specific human capital, or if (ii) (after a future recovery) recruiting a new qualified staff is difficult and recession-related losses are expected to be only transitory, firms have to consider labour hoarding as a relevant strategy. In this environment a moderate temporary employment subsidy will be sufficient to avoid layoffs by firms currently operating at losses. Depending on the size of sunk (re-)hiring costs, cyclical layoffs or even permanent job destruction can be avoided by short run subsidies during the beginning of a recession.